The majority of Irish people has shied away from investing money in the stock markets, but the growing number of flotations is helping to attract private shareholders in greater numbers.
Research by Goodbody Stockbrokers estimates that 13 per cent of the Republic's adult population - 380,000 people - hold stocks and shares. While still low by international comparisons, this figure is up from 4 per cent in 1997.
The impending flotation of Telecom Eireann and the growing number of demutualisations here have been major factors in whetting the public's appetite for share ownership, according to the report. Based on its research, Goodbody's suggests interest in investing in the stock markets is set to increase dramatically. Goodbody managing director Mr Roy Barrett says increased wealth and low interest rates are making share ownership an increasingly attractive option for Irish people. "Given that almost 1.2 million people have registered their interest in the Telecom Eireann share offer, it is obvious that the desire to know more about owning shares has never been higher."
Goodbody points to the surge in interest by private investors in the stock markets in Britain since the major privatisations there. Today, one in four adults in Britain owns shares and Goodbody is predicting similarly strong interest here, particularly in the wake of the Telecom Eireann flotation. Share ownership is widely spread throughout the various social groupings in the Republic. Goodbody's research shows that farmers represent almost half of all shareholders here, many of whom would have taken up shares in the agricultural co-ops as they came to the market.
A typical shareholder will be male, aged between 35 and 49, living in Leinster, but outside of Dublin. Almost half of the Republic's shareholders are female.
Despite the huge growth in share ownership, Goodbody found that most Irish people still prefer to put their money in traditional investment vehicles, which in the current environment offer relatively poor returns.
"The report demonstrates that many investors are still unaware of the return on share investments; they are unsure about how to go about buying and selling shares; or believe they are too risky an investment, irrespective of return," according to chief operations officer Mr Peter Connor. The broker believes the reduction in capital gains tax introduced in the last budget, tax incentives for employees to participate in save-as-you-earn schemes and changes in the rules for pension investment will encourage more people to look to the stock market.
